Philip Morris IV
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Posts posted by Philip Morris IV
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Closely guarded.
It's not really an explanation, though can't blame him for being secretive.
We speculated in the IDIX thread that the bio-techs were mostly his analysts picking in something of a basket/lottery ticket style. It is weird to reconcile the author of Margin of Safety with those type of investments, and the letter commentary on his team appears to confirm these were their contributions to the fund, less his.
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Yeah I am not married, but am usually quick to advocate Roths for clients when they're a good fit.
You just scared me for a second, Eric :) thinking I may have missed a material disadvantage to Roths. Good news that it's not the case.
FWIW I'm sure that a divorce Roth gains tax can happen if the transfer/rollover isn't handled well or completed within the time window.
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So if I have a 10m Roth IRA with a cost basis of 300k, she would get 5m in a 50/50 split. But that 5m is probably 150k cost basis, and 4.85m "gains". So the government would tax that gain as a taxable withdrawal.... and at 50% tax rate in California, it's probably something like 2.425m in taxes to be paid... so then the courts would likely take more of my assets to help her settle the tax bill.
All this despite the tax bill supposedly already having been settled at time of Roth conversion.
It's a double tax.
I did not know this -- does anyone have a source or other material to read on that? I'm looking at Pub. 590 and there's no mention of Roth splits in divorce automatically being considered taxable withdrawals, which I imagine is a relatively common issue. Can the ex-wife not simply rollover the Roth "distribution" to her own Roth and not trigger the tax?
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Congratulations!
And don't forget to set up for your public vehicle a second class of Korean-style preference shares for us super-deep value investors!
Had a good LOL at that one!
Congrats Sanjeev -- great news and am excited for this new saga.
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There was a thread on this topic earlier this year -- I remembered because I was also interested in this.
http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/absentee-run-businesses/
As much as I like the idea, Packer and gg made very effective cautionary points. The marketability of your stake and key-people risk is substantial in this space. A majority are owner-managed and therefore not passive investments. There's also conflicts of interest with the business broker websites.
I wonder if one would have better luck just approaching business owners. If you have reliable intelligence, life events like divorce, death, and retirement can perhaps trigger quiet business sales that wouldn't appear online.
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I think it's kinda funny they still have Deswell.
<0.1% of the fund just sitting there, collecting dust and the occasional few-thousand-dollar dividend.
I guess they figure it's thinly traded, why incur the cost if they don't have to. ;D
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Good luck -- what is the position you're interviewing for?
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Happily joined the 1% club here today. Sanjeev, this is the best community around - much thanks and appreciation for you, and all the members that contribute here.
We should figure out a way to donate stock. :) One more thing on your plate Sanj - the COBF Endowment Annual Report. ;D
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I'm interested in Robinhood and will keep tabs on it, but I almost wish they would charge a modest trade fee. Free trades make me skeptical on how they will be profitable. If most people use margin for short-term trading, how are they supposed to collect meaningful interest income? I don't know about the API-part of the business. Is it possible they might skim off the bid/ask spreads?
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Morningstar: for quick-look key data, ratios, statements and insider/institutional ownership info (no premium, just free acct).
Google/Yahoo Finance: for quotes/chart and news. I like Google's charts more than Yahoo's, but Y!'s overall interface better.
EDGAR
Value Line: for data/numbers, a sense of sentiment and sometimes the commentary.
Gurufocus/Dataroma: for 13F aggregation and ideas. On GF I mostly just peruse the "Guru Bargains" and "Consensus Picks" haystacks for the occasional needle.
Somewhat random, but the IAPD (www.adviserinfo.sec.gov). Occasionally I find an obscure money manager mentioned here or with a concentrated position in a stock, and this is where I look them up and try to find how they manage. Sometimes in their ADV they will plainly spell out that they are bottom-up value investors and the criteria they use to select stocks.
And best for last - here. Not just for ideas but the collaborative analysis has helped me understand industries, companies and valuation techniques far more than any other resource.
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Found this on the Security Analysis subreddit and thought this board would enjoy.
http://www.institutionalinvestor.com/investpitch
19 emerging value managers presented their best current ideas at this conference last month. The link has short 3-4min videos from each presenter talking about their ideas, and you can download their PDF thesis presentations (have to register). currygoat had originally put them all on his scribd account for easy access but it appears they asked him to take them down.
Among the presenters is CB&F's own Kyle Mowery (GrizzlyRock) presenting on Murphy USA (MUSA). Also, someone presented on email encryptor Zix Corp (ZIXI), which had a thread here earlier this year.
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Congratulations Packer and thanks for sharing your ideas and insights. Your posts have helped me understand companies better and I appreciate that.
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This is an interesting discussion. I'm late here but will add from a past experience, and say the points Nate et al brought up about sales/marketing are fair.
I spent 3 years as a retail financial advisor before starting an RIA. Their attitude is the total opposite - marketing is everything. Advisors have elaborate systems to quantify their marketing efforts, like spreadsheets on how many calls, how many meetings, yes's/no's, etc. and spend a great deal of time both alone and in daily team meetings analyzing them.
As far as analyzing investments, most advisors are expected to know just a baseline level that's good enough for most people. Anything beyond that is discouraged. The prevailing attitude is that only big brokerage analysts are qualified to research stocks. When I started thinking about leaving, I thought maybe it was just my firm, but it is not. I frequent another forum for advisors from many different firms and the mentality is similar across the industry.
To an extent, many here represent one end of the spectrum and the retail investment business is the other end. I think it's reasonable to say that one should find a balance. For example, great performance can be a form of marketing, but you still have to work on your visibility. You still have to get in front of new people on a regular basis, present yourself well, schmooze, close them, etc. It is a skill like any other. How you raise capital varies, but it's still an effort that needs attention.
I'm not 100% certain on this, but I believe Buffett went through this same realization shortly after forming his first partnership. He had trouble raising capital, so he studied Dale Carnegie's work and organized seminars for him to meet investors and sell them on himself. He probably spent a few years doing some serious marketing and facing his fair share of rejection early on (although those people probably regret turning him down!).
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Value investing works because of human nature.
I do not think that is about to change anytime soon. So, value investing should provide someone who has the right temperament an edge.
+1, What drew me to value investing initially was how it runs contrary to short-term, pattern-seeking human nature. I don't think people will ever stop wanting fast money. And to institutions, analysts, brokers and the media, value investing is not profitable. To MF managers it is bad for their careers. I'd say we are safe from their endorsement.
Personally I see a much greater trend towards indexing, and to a lesser extent so-called "alternatives" like commodities, derivatives, RE funds, structured products, etc. There's always a flavor of the day.
EDIT: Guitar people, don't forget Pat Metheny!
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At the moment IBM is at 52wk low (actually 90wk low) and roughly 7% FCF yield. Passes the great biz/fair price test. Picked some up for clients today.
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The older I get the more I am thinking like you, no_free_lunch and CONeal. Does it make any sense to take any chance of watching your family get booted out in the street, even if 99 times out 100 it works out in your favor?
My main objective is to avoid catastrophe. Philip Morris IV brings up a good point too about flexibility too.
A big problem with the homeless-avoidance logic is that houses always entail a slew of non-mortgage sunk costs. This makes having a paid-off mortgage an incomplete solution to the worst-case scenario. It helps but is only one expense saved and at most, just buys time. Property taxes, utilities, maintenance, etc. can just as easily force a house sale in hardship. Whether you unlock the home equity to pay off a mortgage or just to survive, the result is the same.
In any case, I'm with xtreeq and Eric in the sense that the stars would have to be uniquely aligned to make someone with a decent investment portfolio homeless. But combine that with an ineffective back up plan and it almost seems more risky to purchase a house in cash (assuming your opportunity cost is liquid investment capital).
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The way I see it: if you borrow, you always have the periodic option to settle the loan with invested capital (especially if you allow for a conservatively-invested reserve). Whereas if you pay cash for the house, I imagine this is a stickier decision to reverse.
You could also front-load the first few years and shave off years on the back-end, or just maintain a desired D/E ratio for your own comfort. The point is, you have more flexibility and can be creative.
Disclosure: not a homeowner or mortgagee.
Eric also makes a great point and I hadn't thought of it that way. If these purchases are inevitable, risk tomorrow might as well = risk today.
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Holy crap - VRA float is 88% sold short?
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Tellabs. They've been building their position for a few years, riding it down and still adding. Selling for just above net cash/WC with no debt, they own 10% and have someone on the board. Their letters have vaguely referenced activist and cost-cutting efforts but nothing more.
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WDFC
I chuckled seeing this. WDFC is my latest unicorn stock - love to buy, but not cheap. I kinda doubt it's Sanjeev's secret pick.
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You are correct, I misspoke. I was speaking personally. Looking back my wording was misleading, sorry! :)
The incentive I didn't consider, although I imagine outside of a partnership you would lose the carried interest tax deferral.
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Correct - fee incentive.
SMA has to do 1% flat, can't have performance or hurdle. With LP can do 0/25 with annual hurdle/high water mark.
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Philip, I'm not yet sure that I'm with you ideologically, but I've been "with you" by circumstance, having been renting all my life so far, I'm in my early 30s. It definitely helps with mobility and being able to pack-up and move wherever you want or wherever a new job is with a short notice. But at some point, especially with family/kids, it might make sense to settle down for a decade or two into owned real estate, until the kids are grown, after which the freedom of not owning real estate is again a good proposition. On the other hand, real estate is a good way to diversify your overall asset base, instead of renting and having all your money in equity markets.
Yes, I did consider the family component. Especially considering schools. Might even scrap this idea altogether in 5 years, so who knows.
For now I'm still in dream mode. Personally not sure if I'll have kids, and hope to find a wife that shares the same love of adventure.
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This oughta throw off all those forecasters. ;D Except now we can expect a new batch of forecasts from the pundits.
Interesting change for the nature of the Dow. Seeing as Goldman and Visa are both over $150/sh, they're just behind IBM as the highest-weighted components.
Why American Express Brand is valuable?
in General Discussion
Posted
In the context of the card networks, my impression is the Amex brand stands out because their closed-loop scheme forges a singular identity.
With Visa/Mastercard, the card identity is split between themselves and the bank issuers, and naturally, people associate their cards more with the issuer. People call their banks with matters relating to their cards, and change cards based on their feelings and the fees/benefits of the issuer -- not their feelings on V or MC specifically.
Regarding why people get Amex's, yes the customer service and benefits are top notch but they've also been successful leveraging their brand to create a "vicious cycle" with merchants and cardholders. Because Amex holders are of higher credit quality and spend more per purchase, merchants understand they need to accept Amex to gain access to that clientele. Amex exploits this with higher merchant fees, which then subsidize more benefits to cardholders, and so on.